Wealthy buyers are shunning luxury cars such as Porsches, Aston Martins and Bentleys, and are instead once again splashing out on luxury flats in London.

Since the recession, affluent buyers have been slow to return to the luxury car market, according to an analysis by upmarket estate agent Savills. By May, year-on-year sales of luxury car brands had increased by less than 4%, while housing transactions in London's most expensive areas we up by around 88%, although they still remain below the peak.

"Unlike with a Porsche, the value of a central London property stays rooted in central London," said Lucian Cook of Savills. "Its price is fixed in sterling and in the long term its value is underpinned by London's position as a world city. In contrast to the depreciating value of a new car, the value of a residential property in prime central London will, according to our forecast, increase by 35% over the next five years."

Tom Hartley, founder of the eponymous luxury car dealership in Derbyshire, said: "The market is very strong on second-hand cars. There is a lot of money changing hands, but people are opting to buy second-hand."

Prices have also fallen sharply. Two years ago, at the height of the market, a Bugatti Veyron would have cost £1.1m; today it goes for £800,000.

Luxury car dealers usually enjoy a boom after the City bonus season, as does the top end of the housing market. Pay in the financial sector is estimated to have increased by 25%, following a 45% drop between December and March last year.

"Those with equity have been choosing mid-term growth over the more temporary luxury, but it is not yet clear what will happen this year," said Cook.